EU pig prices surge past UK prices
The surge in EU pig prices which began at the end of April continues unabated. This took it to over €155 per 100kg for week ended 26 June, the highest level since September 2014.
The EU average reference price increased by nearly €28 per 100kg over that period and by €14 in the latest four weeks. The price has now moved back above year earlier levels, the first time there has been a significant year-on-year rise since 2013.
The stronger market is being driven by a combination of supply and demand factors. There are reports of tighter supplies in several Member States, which have occurred earlier than previously forecast. At the same time, domestic demand has been boosted by the onset of the barbecue season in northern Europe and the tourist season further south. More holidaymakers are reportedly choosing to stay in Europe this year, rather than risk venturing further afield to North Africa or Turkey. Export demand, particularly from China, also remains at record levels.
All of the EU’s major producers have benefitted from the rising market. In the latest four weeks, the sharpest rises were recorded in the Netherlands and Spain, both of which saw rises of €19 per 100kg. The German reference price rose by €13 during the same period, as did the French price, while the Danish quote was up by €11. Ireland recorded a more modest €5 rise.
The upward momentum of the EU market meant that the EU average price moved above the UK reference price in the latest week, for the first time since August 2013. It is worth noting that this was the week before the EU referendum result was announced. Since then, the value of the pound has decreased, so the sterling value of EU prices will have risen further. At the current exchange rate (as at mid-morning on 5 July), the EU average price for week ended 26 June would have equated to over 130p/kg, nearly 10p higher than the UK reference price.
Stephen Howarth, Market Specialist Manager
Stephen.firstname.lastname@example.org, 024 7647 8856